Santander ups stakes in current account war

Banks and building societies are locked in a continuous battle to attract new business via a range of savings and lending products, but the Holy Grail as far as customer acquisition goes has always been the current account.

Providers utilise vast advertising budgets to highlight the benefits of their bank account and why it is a better option compared with similar accounts offered by their competitors.

However, the biggest hurdle as far as the banks are concerned is that customers are reluctant to change banks. Some people feel that all banks are much the same, whereas others are concerned that the transfer process is fraught with danger and so they stay put, even though their existing account may not be right for the way they run their finances.

It has become increasingly common to offer financial sweeteners to tempt customers to switch their current account, with up to £100 on the table from some banks.

This week the Spanish giant Santander is throwing down the gauntlet to its rivals by offering up to £300 to customers who transfer their current account.

The £300 bounty is available to existing Santander mortgage customers who deposit at least £10,000 in a Santander savings account and also transfer their current account. For its mortgage customers that switch their current account to Santander but not their savings, the cash incentive is still a very tempting £200.

There is no doubt that Santander offers a range competitive current account and savings products. At the same time, however, it has had a reputation for below average customer service, something that it says it has been working hard to improve.

The latest FSA complaints data highlights that the extra customer service focus is beginning to pay off.

The bank is moving in the right direction with banking complaints down 36 per cent in the first half of 2011 when compared with the same period last year.

There is no doubt that these new promotional cash incentives are generous and I am sure will generate new business but the service improvement initiatives must remain Santander's number-one objective if it wants to build long and rewarding relationships with its current account customers.

Credit card offers, thick and fast

Only last week I mentioned how we were seeing the credit card market industry focussing its efforts on two distinct fronts, namely the long-term 0 per cent balance transfer market and credit card cashback or rewards.

This week we've seen further new examples of each.

First Direct has joined the frenzy in the balance transfer war with a new 20 month interest free promotion. The deal falls just short of the best buy offers of 22 months from Halifax and Barclaycard and is only available to existing or new First Direct current account customers.

Sainsbury's Finance, on the other hand, has launched a good all-round card with a particular focus on rewarding regular Sainsbury's shoppers. The latest Sainsbury's Nectar credit card at 16.9 per cent APR comes with 0 per cent on balance transfers for a credible 15 months, but for those without a balance to switch, it offers 6 months interest free on purchases and a reward rate equivalent to 2 per cent when used in store, online or at Sainsbury's filling stations.

An ISA isn't just for April

Just because the buzz surrounding ISAs has calmed now that we are five months into the tax year, it is still worth checking the rate you are getting on your existing tax-free savings.

Some old accounts that may have been best buys at the time are now paying rates as low as 0.1 per cent, but with accounts paying up to 3.75 per cent available for 2 years and 3.25 per cent for 1 year it is worth reviewing your options.

If you have £5000 in an ISA paying 0.1 per cent you'll get an annual return of just £5, but switch it to an account at 3.25 per cent and becomes a far more respectable £162.50 per year.

Like many people it is likely that you're not sure what rate you're getting, so give your bank a quick call or pop in to find out – don't let it boost its profits at your expense.

Amongst the best fixed-rate ISAs currently available, take a look at Post Office where you can get 3.25 per cent for one year or 3.75 per cent for two years. Both permit the transfer in of previous years' balances. If you are happy to consider a longer term, Halifax is paying 4.3 per cent for a four year fix or you can get 4.5 per cent for five years from Yorkshire Bank and Clydesdale Bank.

Save Our Savers, the independent action group, has launched an e-petition calling on the Government to suspend income tax on savings interest. It would be nice if it came off, but I think it is highly unlikely. So if it's tax free savings you're after, make the most of your annual ISA allowance.

yourmoney@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Life and Style
tech
Arts and Entertainment
Rocky road: Dwayne Johnson and Carla Gugino play an estranged husband and wife in 'San Andreas'
filmReview: In the face of all-round devastation, even Dwayne 'The Rock' Johnson appears a little puny
News
i100
Arts and Entertainment
Bright lights, big city: Melrose Avenue in Los Angeles by dusk
books
Sport
Harry Kane makes Paul Scholes' Premier League team of the season
footballPaul Scholes on the best players, managers and goals of the season - and the biggest disappointments
News
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Pricing Analyst

    £30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

    Guru Careers: C# Project Team Lead

    £55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

    Day In a Page

    Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

    The 161-page dossier that exposes Fifa's dark heart

    How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
    Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

    Exclusive interview with Tripoli PM Khalifa al-Ghweil

    'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
    Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

    Raymond Chandler's Los Angeles

    How the author foretold the Californian water crisis
    Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

    Art attack

    Chinese artist who posted funny image of President Xi Jinping facing five years in prison
    Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

    Cher is the new face of Marc Jacobs

    Alexander Fury explains why designers are turning to august stars to front their lines
    Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

    'I'm climbing Ben Nevis for my daughter'

    Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
    10 best wedding gift ideas

    It's that time of year again... 10 best wedding gift ideas

    Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
    Paul Scholes column: With the Premier League over for another year, here are my end of season awards

    Paul Scholes column

    With the Premier League over for another year, here are my end of season awards
    Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

    Liverpool have seen too much tragedy to forget Heysel

    Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
    Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

    Khan’s audition for Mayweather may turn into a no-win situation

    The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
    Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

    Blundering Blair quits as Middle East peace envoy – only Israel will miss him

    For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
    Fifa corruption arrests: All hail the Feds for riding to football's rescue

    Fifa corruption arrests

    All hail the Feds for riding to football's rescue, says Ian Herbert
    Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

    The Kurdish enclave still resisting the tyranny of Assad and Isis

    In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
    How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

    How I survived Cambodia's Killing Fields

    Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
    Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

    How Stephen Mangan got his range

    Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor